CHAPTER 8 Cost-Volume-Profit Analysis ANSWERS TO REVIEW QUESTIONS 8-1 a. In the contribution-margin approach‚ the break-even point in units is calculated using the following formula: Break-even point = fixed expenses unit contribution margin b. In the equation approach‚ the following profit equation is used: sales volume ⎞ ⎛ unit variable sales volume ⎞ ⎛ unit fixed ⎜ ⎟ −⎜ ⎟ − ⎜ sales price × ⎟ ⎜ expense × ⎟ expenses = 0 in units ⎠ ⎝ in units ⎠ ⎝ This equation is solved for the sales volume in units
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Costs associated with two alternatives‚ code-named Q and R‚ being considered by Lang Corporation are listed below: | | Alternative Q | Alternative R | Supplies costs | $ 64‚500 | $ 64‚500 | Power costs | $ 36‚500 | $ 21‚500 | Inspection costs | $ 11‚400 | $ 26‚300 | Assembly costs | $ 38‚600 | $ 28‚000 | | Required: | a. | Which costs are relevant and which are not relevant in the choice between these two alternatives? |
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OJINKEYA LAURETTA CHINYERE NO 2 ETUGBO LANE OFF LAYINKA STREET‚ APAPA‚ LAGOS STATE. E-MAIL: ojinkeyalauretta@yahoo.com PHONE NO: 08038244400 GOAL: To contribute to economic development through corporate and personal input that result to pragmatic and positive changes. OBJECTIVE: To make personal input through hard work and dedication. WORK EXPERERIENCE: STAFF IN AUDIT DEPARTMENT‚ UBTH. NOV. 2011 – OCT. 2012 UNIVERSITY OF BENIN TEACHING HOSPITAL‚ UGBOWO‚ EGOR LGA‚ EDO STATE NYSC CODE NUMBER: ED/11C/0805
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The cost profit analysis (CVP) determines how cost and volume affect a company’s operating income. To successfully perform the analysis the five basic components have to be known. The components are volume or level of activity‚ unit selling prices‚ variable cost per unit‚ total fixed cost‚ and sales mix. Volume or level of activity is how many units are produced or sold. The unit selling prices are the cost that each unit produced is sold or thought to be sold will sale for. The variable cost per
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Assignment 2: Costs and Profit (20 points) In Section 2‚ you learned about costs and profit. Now‚ you’ll apply what you learned. 1. Choose a real or made up example of a company‚ and describe at least three variable costs the company has. (1-3 sentences. 1.5 points) soaring angels attire company’s first variable cost is shirts they customize shirts to whatever you want them to be but how many shirts you want tells them how much material they need. Same thing with the shoes they also customize
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Total costs of production (including a “normal” return on owners’ investment) per month are: C = 20‚000 + 50Q + 3Q2 a. Express total profits (() in terms of Q. b. At what level of output are total profits maximized? What price will be charged? What are total profits at this output level? c. What market structure did you assume? Why? d. Would your answers in b change if the market for sewing machines were competitive? How? (Specify price‚ quantity‚ and profit levels
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Analysis of Cost‚ Profit and Total Revenue Prepared by: Cajucom‚ Mary Jane Constantino‚ Georgia Escuadro‚ Abigail Ferry‚ Yasmin Joy Orobia‚ Maribel Lopez‚ Rannel Tumale‚ Mary Joyce Submitted to: Mrs. Gina Braga Accounting versus Economic Costs Economic costs Are forward looking costs‚ meaning‚ economist are in tune with future costs because these costs have major repercussions on the potential profitability of the firm. ● Opportunity cost‚ or costs that are incurred
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Internal Cash Control Iasia Goodson ACC/220 June 27‚ 2010 Jaclyn Strauss Internal Cash Control The weaknesses in the scenario E4-5 are huge. The first one is the fact that the company checks are not prenumbered‚ how will you keep track of what check was written and what it was written for. Another weakness would be that the purchasing agent and the treasurer are authorized to issue checks that are kept in an unlocked file cabinet. There is so much room for theft here; as well
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Why Are Cost‚ Revenue & Profit Important? Cost‚ revenue and profit are the three most important factors in determining the success of your business. A business can have high revenue‚ but if the costs are higher‚ it will show no profit and is destined to go out of business when available capital runs out. Managing costs and revenue to maximize profit is key for any entrepreneur. Definition of Terms Revenue is the same as total income for a business and measures all money taken in through
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Activity Based Costing Implementation for a Not-For-Profit Darrell Ament‚ Author The author was tasked with setting up an activity based costing (ABC) system for a not-for-profit organization. The first thing done by the author was to use the internet to research the use of ABC systems for non-profits. The result was the conclusion by the author that QuickBooks’ class feature could be used to track expenses‚ revenues and balance sheet costs for the implementing ABC. Income‚ Revenue and Balance
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